Do I need to pay a contractor accountant for financial and tax advice?
Depending on the seniority and geographical location of the professional advisor, fees can range from £120 to £400 an hour.
A competent bookkeeper can range from £8 to £15 an hour, and there are on-line bookkeeping services available at attractive monthly rates from under £100 a month.
When assessing the relative value-for-money aspect of paying a professional, you have to examine two aspects of your financial affairs: firstly the volume of transactions and secondly the complexity. It costs just as much to record, analyse and compute ten transactions totaling £10k as £100k. Equally, it will cost more to analyse £10k when it is made up of a variety of different type and sizes of amounts, than it will to analyse £100k comprising a small number of simple amounts.
When deciding on whether to use professional help with accounts and tax, bear in mind there is a comprehensive source of free information at the Inland Revenue (when I say "free", what I really mean is that you have already paid for it in your taxes). The Inland Revenue website here will guide you through all the tax laws which apply to your situation and you can get free copies of any information leaflets you need at any time.
When you pay a professional to do your accounts and tax returns, what you are paying for is peace of mind and keeping your attention focused on the job in hand i.e. earning your own fees. However, if you feel you are competent enough to keep your own accounts and submit your own tax returns, you can of course save yourself a substantial amount of money. It is a question of balance and your own expertise and finances.
Article by Angela Brooks Wong